[SMM inventory] Review of six Major Policy events in 2019 Nickel Industry

SMM12, 27 Mar: 2019 has several of the highest levels of nickel in history: not only in terms of prices, the Shanghai nickel index in early September surged to an all-time high of 148730 yuan / ton after two consecutive months of sharp gains, but in policy, the news that Indonesia has clearly advanced to next year (with four days left) has also made the market react violently. In addition, the Philippines, as a nickel export giant, has begun to encourage nickel mining. The relevant policies and regulations of these countries have a great impact on the nickel industry both in the world and in China. Next, let's review what major policies have taken place in the 2019 nickel industry.

I. Russia: ban on the export of non-ferrous metal ores and concentrates

The Russian Ministry of Industry and Trade plans to ban the export of non-ferrous metal ores and concentrates and precious metal scrap from Russia from May 1 to October 31, the Russian Customs online website reported on March 13.

SMM comments: according to SMM, China's nickel ore imported from Russia is nickel sulfide ore, which is imported by Jinchuan Company to produce first-grade nickel. The nickel sulphide ore comes from Shanuch mining area, the nickel content is about 4.4-4.6%, and the water content is about 4%. According to SMM and customs data, China did not import nickel mines from Russia in 2014 and imported an average of 86200 wet tons of nickel sulphide from Russia between 2015 and 2018, equivalent to about 3500 tons of metal per year (estimated at 4.5 per cent nickel content, 4 per cent water content and 95 per cent yield). If Russia were to ban the export of nickel mines from May 1 to October 31, 2019, it would affect imports of about 1800 metal tons. According to SMM, China's native nickel production in 2019 will be 754800 metal tons, and that of primary nickel production will be 156800 metal tons, that is, Russia's ban on the export of nickel mines will affect 0.24% of domestic primary nickel production and 1.15% of primary nickel production in 2019.

"View details: [SMM exclusive] how does Russia's ban on the export of non-ferrous ores affect domestic nickel supply?

II. Listing of stainless Steel Futures

At 9: 00 a.m. on September 25, the world's first stainless steel futures was officially listed on the Shanghai Futures Exchange. According to reports, stainless steel futures is the 20th variety in the past 20 years. Jiang Yan, chairman of the Shanghai Futures Institute, said in his speech that the world's first stainless steel futures listed on the Shanghai Futures Exchange today is another important measure for the Shanghai Futures Institute to help build a full variety chain of steel futures and serve the real economy, and to support the construction of the Shanghai International Financial Center.

"View details: [SMM topic] how to trade and deliver stainless steel futures? Let's hear what the authorities have to say.

"View details: [SMM Abstract] read the draft for public consultation on the last issue of stainless steel futures contracts and related rules.

III. Solid Hammer for banning Mining in Indonesia

In early September, Indonesia signed a decree banning the export of nickel mines in advance, which mentioned that the export quotas for nickel mines that had been approved and the new quotas approved in the following months of this year were valid for no more than December 31, 2019. That is, from January 1, 2020, there will be a complete ban on the export of all grades of nickel mines in Indonesia. According to the document, in order to ensure continuity in the supply of nickel processing and refining facilities directed by the President of the Republic of Indonesia on 24 July 2019 and 26 August 2019, as well as the construction of several nickel processing and refining facilities in the country, it is necessary to adjust the provisions of Regulation No. 25 of the Ministry of Energy and Mineral Resources on minerals and coal mining. In the light of the considerations mentioned above, it is necessary to develop the second Amendment to the regulations of the Ministry of Energy and Mineral Resources No. 25 of 2018 on minerals and coal mining.

Indonesian Ministry of Energy and Mines: has signed an early mining ban bill banning the export of all grades of nickel ores from next year

IV. Lifting of the ban on Vale's resumption of the On ç a Puma nickel mine

At the end of September, Brazil's Vale began resuming production at its US $3 billion On ç a Puma nickel mine complex, and the country's Supreme Court suspended the ban on the miner earlier this month. Earlier, on 18 June, Vale issued a notice suspending nickel production at the On ç a Puma plant in Pará state. The company said that since September 2017, mining activities at the On ç a Puma mine had been suspended by previously passed judicial decisions. It is reported that the Para State Government and the National Indian Foundation (Funai) (Funda ã o Nacionaldo subnet ndio-Funai) have filed a public civil suit against Vale through the Federal Prosecutor's Office, asking for a moratorium on its mining activities in On ç a Puma. Until mid-September, (Vale), a Brazilian miner, said in a document that Brazil's Supreme Court had authorized the restart of nickel processing in the Onca Puma mine.

SMM comments: according to SMM, On ç a Puma is a 100 per cent wholly owned subsidiary of Vale, using the local laterite nickel mine to produce high-grade ferronickel through the RKEF process, with a capacity of 54000 tons, currently running only half of the capacity. Due to overhaul, Q1 produced only 4300 tons in 2019, down 21.8% from 2018Q4 and 24.6% from 2018Q1. It was reported that Vale had earlier announced that it would invest 190 million reais (about $46 million) to rebuild and develop the Macacos communities (), Bar ã ode Cocais and Itabirito communities in New Lima), which had been affected by the deadly dam blast. In January at the company's C ó rregodoFeij ã o mine. The accident released a large amount of mine waste and held Vale responsible. The company said the funds would be used mainly for the construction and renovation of public facilities, the cleaning and thinning of rivers, the construction of schools and the improvement of social and health programmes.

"View details [SMM Express] lifting the ban on Vale restarting the On ç a Puma nickel mine

V. Philippines lifted suspension of ban on nickel miners owned by DMCI

In October, DMCI Holdings said in a regulatory filing Thursday that the Philippine Ministry of Environment and Natural Resources had lifted a moratorium on nickel miner Zambales Diversified Metals. Zambales Diversified Metals is a subsidiary of DMCI Mining and is owned by DMCI Holdings. Several Filipino miners, including Zambales Diversified and Berong Nickel, two nickel mining companies owned by DMCI Mining, were suspended or shut down after the Philippine government conducted a series of audits of the industry's compliance with environmental regulations.

SMM comments: according to SMM, Zambales Diversified Metals is located in the Zambales area, the main output of nickel ore, every year from June to the end of October is the rainy season, during which the mine can not be mined and shipped. In July 2016, the Philippine government announced that Zambales Diversified Metals had suspended operations because of illegal environmental regulations and stopped issuing mining permits. But, Zambales Diversified Metals did not ship much until the mine stopped operating. According to SMM, the mine exported about 220000 wet tons of nickel in 2014, no nickel in 2015 and about 100000 wet tons in 2016, accounting for less than 0.5 per cent of the Philippines' annual exports.

"View details: [SMM Analysis] is the nickel market affected by the lifting of the ban on nickel mines by DMCI nickel miners in the Philippines?

VI. The European Union complains to the WTO about Indonesia's ban on the export of nickel mines. The Indonesian government has responded strongly.

In November, the European Commission said the European Union had lodged a complaint with the World Trade Organization (WTO) about Indonesia's restrictions on exports of nickel and other raw materials. The committee responsible for coordinating EU trade policy, which consists of 28 countries, says these restrictions unfairly restrict the access of EU producers, particularly nickel, scrap metal, coal and coke, iron ore and chromium. The Committee also questioned subsidies that encouraged Indonesian producers to use local rather than imported content, which violated WTO rules. European Trade Commissioner Cecilia Malmstrom (Cecilia Malmstrom) said the measures taken by Indonesia jeopardized further work in the EU steel industry. "despite our joint efforts, Indonesia has taken steps and even announced a new export ban for January 2020," according to the European Commission statement. "

Follow-up: Indonesian President Joko Widodo says Indonesia will not be nervous for fear of being sued or protested by other countries. "for the sake of our national interest, even if we face protests from other countries, we will face it," he said. The Europeans sue us, and we will have lawyers ready to win the lawsuit. Indonesia has been heavily dependent on exports of certain commodities in recent years, such as nickel mines of raw materials, which has left Indonesia with no added value for its exports. We want to export finished products, nickel has begun to industrialize, we will limit the export of nickel raw materials, we hope that this raw material will add value. "

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